Foreign Investors Pull ₹52,000 Crore in October, Yet Nifty Rallies
Foreign portfolio investors (FPIs) have sold Indian equities worth a net ₹52,100 crore so far in October, already surpassing September's total outflows, according to The Economic Times. The sustained selling, driven by high US Treasury yields and rising oil prices, takes the total FPI withdrawal in 2026 to over ₹3 lakh crore. Despite this foreign exodus, the Nifty index gained 2.8% last week. The divergence highlights the strength of domestic institutional investors, who have been absorbing the selling pressure and supporting the market.
What this means
This is the story of two opposing tides. The foreign tide is going out, pulled by the gravity of a 5.3% US 10-year Treasury yield, which makes 'safe' US debt more attractive than 'risky' emerging market equities. The domestic tide, however, is coming in, fuelled by consistent flows into mutual funds and insurance. This 'decoupling' is a significant shift; for years, FPI flows dictated the market's direction. Now, domestic money has enough firepower to challenge that. For bank treasuries and wealth managers, this means market direction is no longer a simple function of watching FII data. Understanding the behaviour of domestic institutions is now just as important. The big question is how long this tug-of-war can last.
Most affected: Bank Treasuries & Wealth Management
Key takeaway: Don't assume FPI outflows will automatically lead to market declines; domestic flows are now a powerful counter-force.
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